The Age of Turbulence: Adventures in a New World.

• Author: Niskanen, William
• Position: Book review

The Age of Turbulence: Adventures in a New World Alan Greenspan New York: The Penguin Press, 2007, 505 pp.

Alan Greenspan, for an $8 million advance, has written two books in one. The first 11 chapters are a personal memoir from his earliest childhood memories through the end of 2006. The final 14 chapters are a series of lectures about the major recent changes in the United States and the world economy. The book is written in clear English, not Greenspan's occasional "Fedspeak," and is a pleasure to read--the result of a productive collaboration with Peter Petre, who taught him to write in the first person as a participant rather than only as an observer of the many important events in the past several decades. This is important because Greenspan has a lot to say about the people and policies of six administrations from that of Richard Nixon to that of George W. Bush. And it is important for both economists and others to understand the major lessons from this period.

For economists, it is important to understand Greenspan's preparation for his several public roles. Most of his broad economic education seems to have been self-taught, derivative of his long experience as an economic consultant. His only course in macroeconomics was from Arthur Burns, a distinguished academic specialist in business cycles and later a chairman of the Federal Reserve. Like most economists of his age, Greenspan's own macroeconomics may best be described as casual Keynesianism. Like his mentor Burns, Greenspan believed that most major trends in the inflation rate were the result of nonmonetary forces--Burns, as an explanation (or rationalization) of the rapid increase in inflation on his watch, and Greenspan, as an explanation of the broad reduction of inflation and long-term interest rates on his watch. And, again like Burns, Greenspan believed that the most important general cause of inflation was excess government spending. Greenspan never had an academic appointment or a record of articles in peer-reviewed professional journals, which seems like a very strange background for someone who would become the most important central banker in the world.

The memoir section of this book is long on commentary about the people with whom he dealt but short on reflections about his experience as chairman of the Fed. Among issues that I had hoped to read about are the following.

The book does not mention what might have been Greenspan's reflections about the lessons to be...